Choosing a Medigap Plan

After 23 years of covering -- and giving advice about -- Medicare, a veteran journalist wades into the system herself. Part three of a 5-part series.

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Medigap and Medicare Advantage sales brochures had been stacking up in my mailbox since January. I knew I had to find the best way to fill in my Medicare coverage gaps, so I decided to tackle Medigap plans first.

It quickly became clear that the push to give consumers more choices and more information has actually made the job of picking a Medigap plan much harder. I ended up having to check out multiple websites, brochures, handouts and make several toll-free calls for assistance. Hopefully, a look at my virtual odyssey will make yours a bit easier.

Alphabet Soup

For a start, the government’s website tells me that I can choose from among 96 Medigap policies offered in New York City alone. Congress standardized the benefits for 10 different categories of Medigap plans and named them by using letters of the alphabet. In theory, this means that all consumers have to do is select the set of benefits they want and compare the premiums (and the various methods for calculating them) for the plans in that category.  I checked out what the government’s handbook Medicare & You had to say about these 10 types of Medigap plans. Not much, it turned out. It said there were two new plans, M and N, and that plans E, H, I, and J are no longer available. It didn’t say what those plans covered.

To the Web

For descriptions of the standardized plans, both old and new, I had to visit medicare.gov or phone 1-800-Medicare (or, because I live in New York, the New York insurance department or state health insurance counseling and assistance program).
[time-link title="(Read Swampland's post about Sen. Joe Lieberman's Medicare proposal)" url=http://swampland.time.com/2011/06/14/some-medicare-ideas-worth-considering/]

I started with the government website. It looked like Plan F might be my top choice because it’s the most comprehensive and would cover me in case doctors don’t accept Medicare as full payment. In the past, most docs have accepted Medicare’s payment levels, but that may be less likely in the future and I didn’t want to take the risk. I was comfortable paying somewhat higher monthly premiums to avoid the risk of large uncovered medical bills down the road. There were 14 Plan F policies for sale in my Zip Code.

What Would a Medigap Plan Cost, Now and Later?

Since all insurers selling Plan F must offer the same benefits, next I needed to know two things — the current monthly premium and how companies calculate annual premium increases. Medicare’s website gave a price range for Plan F policies — $197 to $422 with contact information for the 14 companies. I guess I was supposed to call each of them. When it came to how future premiums would be calculated, crucial information was missing.

Pricing by Age or Community?

Community-rated policies are usually best because premiums don’t change just because you get older — the costs are spread out over the “community” of all ages and across the sick and the well. That’s a good reason to avoid policies that might pile on extra costs just because you’re aging. Since income often shrinks in retirement, this is “need-to-know” stuff. Only five Plan F sellers disclosed their pricing methods: they all used community ratings. What about the others? I would not buy a policy from a company that didn’t reveal its pricing method.
[time-link title="(Read Joe Klein's piece on the Medicare reform debate)" url=http://www.time.com/time/nation/article/0,8599,2075194,00.html]

Tracking Down Prices

Since I was still missing current premiums and pricing information, and wanted to avoid making 14 phone calls, I called the Health Insurance Information Counseling and Assistance Program for New York City, lodged at the city’s Department of Aging. The counselor I talked to offered me a booklet that listed prices for 11 of the 14 companies selling Plan F in NYC. There was no plan with a $197 premium as the government website suggested. But I did learn that all Medigap plans sold in New York were community rated, a protection unavailable in most other states.

Next I visited the website of the New York State Department of Insurance searching for more current premium information. Eleven sellers offered premiums ranging from $251 to $409. I still had a few questions before I committed to a Medigap plan so I called the department’s toll-free number.

I’m still mulling over what I’ve learned so far and making notes as I go. But I’m struck by the complexity of the process. I’m a veteran health care journalist and the legwork has been demanding even for me. How many seniors can possibly navigate their way from a government issued handbook to multiple websites and to toll-free assistance from different agencies and companies?

What’s more, the information I did find was often incomplete, contradictory and confusing. Is this really the best that can be done to make this critical information available and simple to find?

Having looked at Medigap policies, it was time for me to consider Medicare Advantage plans. I’ll tackle that challenge in next week’s post.

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